Federal Judge Halts Overtime Rule

Just 10 days before the implementation date, a federal judge in Texas put the brakes on the Department of Labor’s (DOL’s) new federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay.

Twenty-one states filed an emergency motion for a preliminary injunction in October to halt the rule. They claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.

The states’ case was consolidated last month with another lawsuit filed by the U.S. Chamber of Commerce and other business groups, which raised similar objections to the rule.

The overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476. The rule also provided for triennial adjustments based on the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region.

“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas in a Nov. 22 ruling.

“This is a total surprise in many respects, but you have to tip your hat to the judge who made a tough call and hopefully a decision that will stay in place,” said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and a former acting administrator of the DOL’s Wage and Hour Division.